Young and in debt!

b81292

I'm 21 and really struggling with my debt. I got my first credit card at 18 and just spiralled on from there. I currently have 2 credit cards (I had my first Halifax card with a 2k limit interest free , once this ran out I transferred to a barclaycard with an 3.5k limit. I was however incredibly stupid and started spending on the Halifax card once the Barclaycard was maxed.) and now they are both maxed out. I checked my credit score which changes from good to fair. I just can't afford the repayments on both cards as they are both charging high amounts. I live at home and earn less than 10k a year.
I'm wondering whether to start a debt management plan as by the time I'm ready for a mortgage it should be off my credit file?

Total nightmare!!!

National_Debtline

Hello there,

To get a better idea of the potential options open to you, please consider filling in a statement of account - here's a link: http://www.stoozing.com/calculator/soa.php

On the face of it, a Debt Management Plan could be a useful option. If you choose this route, please consider only going with the free providers - we've a useful fact sheet here:
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=29_debt_management_plan

There is also a general guide to dealing with debts, which is orth downloading: http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#4

Once you've completed your statement, please post it up - we can all then help you move this forward.

Best wishes,

David @ NDL.

thecassman86

Hello and welcome! :wave:

As suggested above, completing an SOA is definitely the next step and then people can give better advice on what your options are.

Be prepared to have everything scrutinised but it's clear that you want the debt shifting so i'm sure you'll cope!

Without an SOA it's tricky, but, the first thing that jumps out to me is that you live at home and yet can't afford the debt repayments - this tells me you're spending a lot on other things.

Anyway, post up an SOA and you'll get plenty of help on here!

b81292

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\outl0\strokewidth0 \strokec2 Statement of Affairs and Personal Balance Sheet\
\
Household Information\
Number of adults in household........... 2\
Number of children in household......... 0\
Number of cars owned.................... 3\
\
Monthly Income Details\
Monthly income after tax................ 720\
Partners monthly income after tax....... 0\
Benefits................................ 0\
Other income............................ 0\
Total monthly income.................... 720\
\
Monthly Expense Details\
Mortgage................................ 0\
Secured/HP loan repayments.............. 0\
Rent.................................... 0\
Management charge (leasehold property).. 0\
Council tax............................. 0\
Electricity............................. 0\
Gas..................................... 0\
Oil..................................... 0\
Water rates............................. 0\
Telephone (land line)................... 0\
Mobile phone............................ 42\
TV Licence.............................. 0\
Satellite/Cable TV...................... 0\
Internet Services....................... 0\
Groceries etc. ......................... 0\
Clothing................................ 40\
Petrol/diesel........................... 50\
Road tax................................ 0\
Car Insurance........................... 62\
Car maintenance (including MOT)......... 0\
Car parking............................. 0\
Other travel............................ 0\
Childcare/nursery....................... 0\
Other child related expenses............ 0\
Medical (prescriptions, dentist etc).... 14\
Pet insurance/vet bills................. 0\
Buildings insurance..................... 0\
Contents insurance...................... 0\
Life assurance ......................... 0\
Other insurance......................... 0\
Presents (birthday, christmas etc)...... 80\
Haircuts................................ 0\
Entertainment........................... 0\
Holiday................................. 0\
Emergency fund.......................... 0\
Total monthly expenses.................. 288\
\
\
Assets\
Cash.................................... 0\
House value (Gross)..................... 0\
Shares and bonds........................ 0\
Car(s).................................. 800\
Other assets............................ 1000\
Total Assets............................ 1800\
\
No Secured nor Hire Purchase Debts\
\
Unsecured Debts\
Description....................Debt......Monthly...APR\
Halifax card...................2000......80........6.9\
Barclaycard....................3700......80........0\
Total unsecured debts..........5700......160.......- \
\
\
Monthly Budget Summary\
Total monthly income.................... 720\
Expenses (including HP & secured debts). 288\
Available for debt repayments........... 432\
Monthly UNsecured debt repayments....... 160\
Amount left after debt repayments....... 272\
\
Personal Balance Sheet Summary\
Total assets (things you own)........... 1,800\
Total HP & Secured debt................. -0\
Total Unsecured debt.................... -5,700\
Net Assets.............................. -3,900\



I LIVE AT HOME WITH PARENTS AND DO NOT PAY BOARD

redpete

So do you have £272 left over each month? I guess not otherwise paying off the debt wouldn't really be a problem. You need to think harder about where your money goes each month - keep a cash diary for a few weeks and be honest.

You spend nothing on entertainment? (pub, clubs, cinema, meals out...)

£42 a month on a phone is higher than it needs to be - your probably stuck in a contract but consider a much cheaper when you can.

£80 a month on presents is a lot when you earn so little and owe so much.

Nothing for car maintenance (servicing, MOT) or car tax?

When does the B'card 0% offer come to an end? At the moment the interests are very reasonable for CCs - you need to pay off as much as possible before they increase.

[Deleted User]

b81292 wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 3 - 2 adults but 3 cars :huh:


Monthly Income Details
Monthly income after tax................ 720 - Any chance of overtime/a second job?
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 720

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 42 - This is a lot. Reduce to PAY/sim only (about £10pm) ASAP.
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 40 - Every month?
Petrol/diesel........................... 50
Road tax................................ 0 Nothing :huh:
Car Insurance........................... 62 - Can you add a more experienced driver (parent, older sibling etc.) to get this down a bit?
Car maintenance (including MOT)......... 0 - Nothing. :huh:
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 14
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 80 - This is £960pa, which is a LOT. Reduce to £50pm, at the most.
Haircuts................................ 0 - Never?
Entertainment........................... 0 - Nothing?
Holiday................................. 0 - Not even days out?
Emergency fund.......................... 0 - You need something in here, if only for car repairs.

Total monthly expenses.................. 288


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 1000
Total Assets............................ 1800

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Halifax card...................2000......80........6.9 - This is the one to concentrate on.
Barclaycard....................3700......80........0 - Pay minimum plus a few pounds to this, until the Halifax Card is cleared.

Total unsecured debts..........5700......160.......-


Monthly Budget Summary
Total monthly income.................... 720
Expenses (including HP & secured debts). 288
Available for debt repayments........... 432
Monthly UNsecured debt repayments....... 160
Amount left after debt repayments....... 272

Personal Balance Sheet Summary
Total assets (things you own)........... 1,800
Total HP & Secured debt................. -0
Total Unsecured debt.................... -5,700
Net Assets.............................. -3,900

You have £270+ left, yet you are struggling to make the payments on your CCs :huh:

Would I be right in thinking, you don't really have £270+ left?

Given the high cost of running the car, and the small amount of use you make of it, could you manage without it?

b81292

Yes I do have around that amount left a month, I am just struggling to clear the debt and I just want it clearing. As I have so much credit I can't get a loan and the only option is a DMP which I really don't want. With the interest levels rising I'll never clear my debt.
All this credit will affect me getting a mortgage in the future too.

cyclura

So whats the problem? If you have that much left a month then throw everything spare you have after paying minimums at the Halifax card and it will be paid in about 8ish months. Then concentrate on the other one. You do not need a DMP you have plenty to pay back what you borrowed so dont worry about that. And because you will be paying minimums and more your credit rating will not be destroyed by a DMP. Just keep paying it.

MPH80

But if you have that money left each month - then you can pay it at the debt - have the halifax card gone in under 10 months and be well on the way with the barclaycard.

Since you are struggling to pay it off - for all the red highlight bedsit bob put on your SOA - that probably indicates where the money is actually going. E.g. there's no allowance for going out/car maintenance etc.

So you need to re-look at your SOA and work out what you actually spend, on average, each month (as we all know car maintenance isn't equally monthly - but you have to allow for it).

[Deleted User]

I'm sorry but you are talking nonsense, saying you will never get it cleared.

If you put another £250pm toward your debt (that still leaves you over £20 spare), making it £410pm, you can have both cards cleared in 14 months, for just £30 interest.

If you also used the £30 from the reduced presents budget I suggested, and stopped buying clothes for a while, you could have them cleared in 12 months, for just £23 interest.

The only question is, have you got the determination to stick to such a plan?

mobo1980

Hi b8 would just like to say i got into debt aged 18 first with a loan then getting topped up and it went on from there , if only i had the advice then that is available to you now on this site things might have been different .

You can do this as people above have said it's just a question of how much you want to , I really don't think you need a dmp you're still young . I am finally in a position later this year (fingers crossed) to be buying my first home with o/h - im 34 and soo wish i had tackled my debts years ago - good luck !!

P.s I am a big fan of Dave Ramsey and his snowball method look it up on youtube it's not for everyone but when i finally had my lbm it really was useful to me and o/h.